HOME IMPROVEMENTS: Which Home Improvement Projects Offer the Best Returns?

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.

"This year's Remodeling Cost vs. Value Report shows the value of putting your home's best façade forward, so to speak," said National Association of REALTORS® President Moe Veissi. "Inexpensive exterior replacement projects are not only crucial to a home's regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal."


HouseLogic.com, NAR's consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.


Two additional siding replacement projects were in the top 10, including foam-backed vinyl

MARKET TRENDS: What Had the Biggest Impact on Housing in 2011?

The “government, the mortgage industry, and forces of nature all shook the housing market in 2011,” according to a recent Time magazine article, which highlights the key issues that had the greatest impact on the real estate market this year--and what’s expected to have a major impact in the new year as well. 

Here are a few of the issues that the Time magazine article by Jed Kolko, Trulia’s chief economist, notes as having some of the greatest impact: 

1. The robo-signing scandal

The issue: Banks were accused of approving numerous foreclosures without proper reviews when a robo-signing scandal first broke in October 2010, continuing well-into 2011. 

The fallout: Banks slowed their processing of foreclosures greatly in 2011, making sure to take extra precautions. Regulators and states are working on a settlement with banks over the scandal — one that could include reducing loan balances of current home owners, if approved. Once a settlement is in place, housing experts predict the pace of foreclosures to pick up in 2012. 

2. Natural disasters

The issue: A series of natural disasters wreaked havoc on real estate in 2011, from tornados, floods, and hurricanes. The National Flood Insurance Program was pushed into the spotlight, a

ARCHITECTURE: Would You Live in a Shed?

Downsizing to a shed may seem like a drastic step to take in a resource and financially-strained climate, but U.K-based FKDA Architects is hoping you'll do just that. According to FKDA, the prefab shed idea came as a response to increasing reports "of people being forced from their homes unable to make their current mortgage payments, and turning to live with family, in garden sheds and even cars." 

FDKA's micro-home, built from FSC-certified wood and insulated with cellulosic fiber derived from recycled newspapers, is hardly a garden shed. The so-called shed comes with a skylight, radiant underfloor heating, energy-efficient appliances, ample storage space, LED lighting, and optional solar photovoltaic and hot water heating systems. From the looks of it, FDKA's shed is just as nice as a standard studio apartment--if not nicer.

The shed comes in two options--the 24-square-meter big shed ($57,554-$82,220) and the 13-square-meter little shed ($32,888-$57,554). With energy costs practically taking care of themselves, the

BUIYNG AND SELLING: Bridging the great divide between home buyers and sellers

With mortgage rates below 4% and prices near bottom in many markets, it's a good time to buy a house. But many owners won't sell because they can't get the price they want.

Reporting from Washington— 

Where do you side in the great real estate buy-sell divide of 2012? If you're a homeowner considering selling sometime in the new year, are you apprehensive that you won't get the price you need or want, and therefore it's possible you won't even try to sell?

If you're a buyer, do you agree that with 30-year fixed mortgage rates now below 4% and home prices near cyclical bottom in many areas, 2012 offers extraordinary opportunities, even if listings are fewer than you might prefer?

A new study by the Research Institute for Housing America, the think tank affiliate of the Mortgage Bankers Assn., documents a profound market fissure caused by owners' fears and hesitation — what researchers call "negative selling sentiment."

Nearly 80% of consumers in the study's survey think this is a great time to buy a house, but more than 92% of homeowners think it's not a great time to sell.

The study was conducted by Syracuse University economist Gary Engelhardt using extensive data from the University of Michigan's Survey Research Center, which is generally recognized as an authoritative source on consumer attitudes.

Engelhardt said that compared with earlier post-recession periods, owners have been more deeply shocked by the extent and severe side effects of foreclosures, short sales and unemployment. In the aftermath of earlier recessions, such as in the early 1990s, 40% to 60% of homeowners remained relatively positive about their prospects if they chose to sell — far higher than the tiny sliver who see it that way today.

Many owners "have not adjusted their price expectations downward" to keep pace with local declines in property values after the mortgage bust, Engelhardt said, thereby contributing to the sharp divergence in their real estate visions compared with those of buyers.

This is consistent with the results of a study conducted in mid-2011 by Zillow, the online real estate and mortgage information company.

Zillow found that sellers nationwide were having trouble coming to grips with what market forces had done to their property values. They knew prices had declined, but they didn't necessarily think those devaluations applied to their houses.

For example, people who had purchased their homes in 2007 or later thought their homes were worth about 14% more than their actual sales value. People who bought homes before 2002 were slightly more realistic, but still overvalued their houses by about 12%.

How are such seller perceptions affecting local real estate market dynamics today? For one thing, they are keeping owners out of the game. But they also are bringing more motivated and committed sellers to the fore. Glenn Kelman, chief executive of Redfin, a national realty brokerage in Seattle, said the shortages of listings in some markets are the product of owners "waiting for better

REMODELING: 9 remodeling tips to make your home feel bigger

(MONEY Magazine) -- You don't have to be underwater on your mortgage to feel trapped in your home. Now may be a less than ideal time to put a house on the market or to take on big debt -- icing your plans to trade up or build an addition anytime soon. But that doesn't mean you're stuck living in an uncomfortable home.

Call it thinking inside the box; here are nine creative solutions for cramped homes.For a few hundred to a few thousand dollars, you can make your place "live" bigger without actually making it bigger, says architect Sarah Susanka, a small-space specialist and author of "Not So Big Remodeling."

1. Multitask the dining room ...

Cost: $500 to $2,000

If you have an eat-in kitchen, your dining room is probably used for special occasions only.

"Why have a prime spot sit vacant except for two or three holidays a year?" says Susanka.

Housing: The one bailout America could really use

Use it every day as an office or homework room without giving up dinner-party capabilities. Install doors ($300 to $500 each, with labor); add shelves or a cabinet for supplies; and invest in fitted pads to protect the tabletop.

For more flexibility, try a table like homedecorator.com's $629 Mission Table Cabinet, a sideboard that -- amazingly -- telescopes into a full-size dining table.

2. ... and the guest room

Cost: $100 to $3,000

Stop dedicating a whole room to infrequent out-of-town visitors.

With a decent air mattress, futon, or pull-out couch, you can lose the spare bed and use the room for day-to-day needs. (If you go with an air mattress, make sure to choose one with a built-in reversible motor to simplify the inflating and deflating.)

Add furniture, and what was only a guest room can double as a media or game room or home office.

3. Add a powder room

Cost: $3,000 to $6,000

Adding a first-floor powder room is simple if you have an unfinished basement or crawlspace for running the new pipes. Look for an existing room -- a coat closet, say -- and you won't have to build walls.

To save more, forgo the tile. The minimum space required by code is typically 2½ by 4½ feet, but you can often get an exemption to go even smaller.

4. Build a home office closet

Cost: $100 to $3,000

If your family is already bursting the seams of your abode, a home office might seem out of the question. But every household needs at least a small desk for paying bills and to anchor a wireless Internet system -- and you can often fit it all in a closet or armoire.

At its simplest, all you need are five or six deep, sturdy shelves made from wood or a composite product, which can total less than $40 at a home center. In a closet, set the lowest shelf at 30 inches high so you can wheel up a chair.

5. Bring the laundry upstairs

Cost: $5,000 to $7,000

Hiking up and down the stairs with laundry is enough to make anyone wish she could trade